All about investment

Alan Keys

Due to the high cost of charges by life assurance companies for early surrendered with-profits endowment policies there exists a market for second hand with-profits endowment policies in which brokers find best deals from purchasing market makers.

Those that hold endowment policies have the option to trade policies in before the end of the contract as required by circumstance. Policy holders are able to get improved offers for the policy they hold via competitive bids from the TEP brokers.

Via a broker, TEP Market Makers will assess the value of your endowment and make an offer based on your policy. If you decide to sell, the market maker then takes on the monthly payments until the policy matures or they resell to another individual on the open market.

People who are changing their mortgage, going through divorce, need more capital or who predict a fall in the profit of their endowment may have a requirement to sell they're existing with-profits endowment or life assurance policies.

Traded Endowment Policies or TEPs are second hand with-profits endowment policies legally assigned to new owners who pay the purchase price and take over the payment of future premiums. The life assurance cover remains on the original life/lives assured, but all policy benefits on maturity or, an earlier life assurance payout, are the property of the new owner.

As TEPs are purchased mid-term the policy already has a guaranteed value made up of the 'Basic Sum Assured' and 'Bonuses Attaching' and the initial charges have all been paid by the original policyholder.

Alan Keys writes for http://lowaprcredit.co.uk